Robinhood, the infamous trading app that invited several lawsuits and even an investigation demand from the US congresswoman AOC after it halted trading of GameStop (GME) stocks on its platform, has now lifted those restrictions and as a result, the price of GME share registered another price rally of over 100% taking the price to $389.50.
— New York Post (@nypost) January 29, 2021
Robinhood created a massive controversy when it decided to halt the trading of GME shares for retail traders while allowing hedge funds to continue their shorting mayhem. However, after a slew of lawsuit threats and intervention by the US Financial Committee member the exchange had finally decided to lift those restrictions.
The CEO of the firm Vlad Tenev appeared on multiple news networks to claim that their decision to halt the trading was to save the traders on its platform from speculative losses. However, not many bought those claims as they believed the decision was forced because of the Hedge Fund pressure and low liquidity.
Robinhood CEO Vlad Tenev defends the company's decision to limit trading on some symbols following the GameStop stock chaos, saying they must "prudently manage the risk and the deposit requirements." pic.twitter.com/z2Ar8d9YX1
— Christopher C. Cuomo (@ChrisCuomo) January 29, 2021
Would wallstreetbets Continue to Rally Behind GME?
GameStop, the popular gaming chain is currently leading the headlines across different fractions in the media post its unprecedented surge to a new all-time high of over $450. The GME price share rose led to billions of shorts getting liquidated as wallstreetbets called for a short squeeze to teach Melvin Group, a wall street Hedge Fund that had bought over 140% in short positions against GameStop.
Many in the Hedge Fund business called it a manipulation as Nasdaq decided to halt the trades, however with the intervention of DOJ, it seems that these platforms have decided to resume trades for the assets again. Many anticipate that the recent removal of restrictions would help the GME stocks to rise further.
The GME stock price surge did not just make retailers rich many wall street giants including BlackRock profited billions from the recent 700% surge. This has also made many questions whether the recent pump was the work of retailers alone.